Posts

What is a Prospectus? Explain the Importance and Contents of Prospectus

Image
What is a Prospectus? Prospectus is an invitation issued to the public to offer for purchase/subscribe shares or debentures of the company. In other words, any advertisement offering shares or debentures of the company for sale to the public is a prospectus. A company secures capital by the issue of prospectus inviting deposits or offers for shares and debentures from the public. Contents of Prospectus The contents of the prospectus have been specified in Schedule II of the Companies Act. The important contents in the prospectus include the following. 1. Name and address of the company 2. Objects of the company 3. Full particulars of the signatories to the Memorandum and number of shares taken by them. 4. The names, addresses and occupations of the directors, managing directors or managers etc. 5. The number and classes of shares. 6. The minimum subscription. 7. The qualification shares of a director and the remuneration of the directors. 8. The amount payable ...
Post a Comment
Read more

What is a prospectus? write the contents of a prospectus

Image
What is a prospectus?  After the receipt of certificate of incorporation, if the promoters of a public limited company wishes to issue shares to the public, he will issue a document called prospectus. It is an invitation to the public to subscribe to the share capital of the company. The companies Act, 1956 defines prospectus as any document described or issued as a prospectus and include any notice, circular, advertisement or other documents inviting deposits from the public or inviting offer from the public for the subscription of shares. It is circulated among the public in printed pamphlets. It gives all necessary information about the company so that the prospective shareholders may fully understand the objectives and the plans of the company. the various contents of a prospectus. Contents: The following important matter are included in the prospectus: 1 The prospectus contains the main objectives of the company, the name and addresses of the signatories of the m...
Post a Comment
Location: Delhi, India
Read more

WHAT IS SHARES? Explain the different kinds of shares issued by a company

Image
WHAT IS SHARES A unit of ownership that represents an equal proportion of a company's capital. It entitles its holder (the shareholder) to an equal claim on the company's profits and an equal obligation for the company's debts and losses. Two major types of shares are (1) ordinary shares (common stock), which entitle the shareholder to share in the earnings of the company as and when they occur, and to vote at the company's annual general meetings and other official meetings, and (2) preference shares (preferred stock) which entitle the shareholder to a fixed periodic income (interest) but generally do not give him or her voting rights. There are two types of shares which a company may issue (1) Preference Shares (2) Equality Shares. 1) Preferences Shares Shares which enjoy the preferential rights as to dividend and repayment of capital in the event of winding up of the company over the equity shares are called preference shares. The holder of preference...
Post a Comment
Location: India
Read more

Define Joint Stock Company. Explain the Features or Characteristics of Joint Stock Company.

Image
Definition Of Joint Stock Company :- A joint stock company is an artificial person recognized by law with a distinctive name, a common seal a common capital comprising transferable carrying limited liability and having a perpetual succession. It is formed and controlled under the company ordinance of the state. It is a very popular form of organization. Features or Characteristics of Joint Stock Company  Following are the important feature of joint stock company : 1. Separate Legal Existence :- joint stock company has separated entity from its members. It can sue in a court of law in its own name. Every body knows only the name of the company and its address. No body knows about the share holders. 2. Long Life :- A joint stock company has a long life as compared to the other forms of business organization. If any share holder dies or withdraws his capital there is no affect on the continuity of company life. 3. Distribution of Profit :- The basic aim of the joint...
Post a Comment
Location: India
Read more

What is a Memorandum of Association? Explain the Contents of Memorandum of Association

Image
What is a Memorandum of Association The whole business of the company is built up according to Memorandum of Association. A company cannot undertake any business or activity not stated in the Memorandum. It can exercise only those powers which are clearly stated in the Memorandum. Definition of Memorandum of Association Lord Cairns: “The memorandum of association of a company is the charter and defines the limitation of the power of the company established under the Act”. Thus, a Memorandum of Association is a document which sets out the constitution of the company. It clearly displays the company’s relationship with outside world. It also defines the scope of its activities. MoA enables the shareholders, creditors and people who has dealing with the company in one form or another to know the range of activities. Contents of Memorandum of Association According to the Companies Act, the Memorandum of Association of a company must contain the following clauses: 1. Name...
Post a Comment
Location: India
Read more

DEFINE SHARE WARRANT. Distinction between a Share Certificate and a Share Warrant

Image
DEFINE SHARE WARRANT Meaning: A share warrant is a bearer document of title to shares and can be issued only by public limited companies and that to against fully paid up shares only. A share warrant cannot be issued by a private company, because the share warrant states that its bearer is entitled to a number of shares mentioned there in. It is a negotiable document and is easily transferable by mere delivery to another person. The holder of the share warrant is entitled to receive dividend as decided by the company. A share warrant is accompanied by attached coupons for the payment of future dividends. There are three parts of a share warrant: (1) The counter foil. (2) Share Warrant proper. (3) The dividend coupons. Conditions for the issue of a share warrant: (1) Only public limited companies: Share warrant can be issued by the public limited companies. It cannot be issued by private companies. (2) Against share certificate of fully paid up shares: A share warrant is only issued ...
Post a Comment
Location: India
Read more

Definition of a Company Secretary.Explain Rights and DUTIES OF THE COMPANY SECRETARY

Image
Definition of a Company Secretary: A Company Secretary means “a person who is a member of the Institute of Company Secretaries of India” According to Section 2(45) of the Companies Act, 1956, “Secretary means any individual possess­ing the prescribed qualifications, appointed to per­form the duties which may be performed by a sec­retary under this Act and any other ministerial or administrative duties”. * Rights of the Company Secretary.. Rights of a Company Secretary are: 1. As the head of the secretarial department, the Secretary has the right to control, direct and supervise the activities of the department. 2. As the principal executive officer of the com­pany the Secretary has the right to sign documents which require authentication of the company. 3. The Secretary has the right to get remunera­tion from the Company. As an officer of the com­pany he has the right to claim two months’ salary as a preferential creditor at the time of winding-up of the company. 4....
Post a Comment
Location: India
Read more